Judge approves delay in Partners deal

Thursday

Jul 17, 2014 at 8:09 PMJul 18, 2014 at 7:19 AM

By Gintautas DumciusState House News Service

BOSTON -- A Superior Court judge on Thursday signed off on Attorney General Martha Coakley’s request to delay a hearing and a decision on a proposed agreement between her office and Partners HealthCare that would settle an anti-trust investigation and allow Partners to proceed with two major acquisitions.

Partners HealthCare, which is seeking to merge with Hallmark Health System and acquire South Shore Hospital, had also agreed to the delay until after an independent state agency’s final analysis.

The judge, Janet Sanders, set Sept. 29 as the next hearing date. The period for public comment, which was originally due to end on July 21, was extended to Sept. 15.

In her request for the delay, which came as she was under fire from her Democratic rivals in the governor’s race over the deal, Coakley left the door open to renegotiating aspects of the proposed agreement with Partners after the state Health Policy Commission (HPC) issues its final cost analysis of the Hallmark acquisition around Sept. 3.

“Our office always retained the option to seek to renegotiate portions of this agreement as it relates to Hallmark following a final report by the Health Policy Commission,” Brad Puffer, a Coakley spokesman, said in a statement. “We asked the judge for additional time so that the HPC’s final report could be fully considered in any final consent judgment.”

In a report on the proposed South Shore Hospital acquisition and a separate preliminary report on the Hallmark portion earlier this year, the commission, which analyzes health care spending and market trends, raised concerns about the potential for cost growth.

During a meeting at the State House on Thursday, the commission voted to submit an overview of its findings to Sanders.

The commission’s reviews of the proposed acquisitions found increases in spending were “anticipated to exceed potential savings,” the commission said in its comments submitted to the judge, adding that for three major health insurers, the proposed acquisition is expected to increase total medical spending by more than $38.5 million to $49 million a year.

The commission said the acquisitions could lead to a permanent increase in baseline “total medical spending in areas of the state that have thus far not experienced the market impact of a local Partners facility.”

Partners has argued that the South Shore Hospital acquisition will save $158 million over eight years. Partners expects to release its response to the commission’s preliminary report on Hallmark, which owns hospitals in Medford and Melrose, by the end of July.

Before Coakley filed her request, Treasurer Steve Grossman on Thursday criticized her in a letter as he registered his opposition to the agreement and said the deal will lead to health care cost increases.

Grossman, who is competing in the Democratic primary for governor with Coakley and former Obama health care official Don Berwick, submitted a letter to the attorney general’s office outlining his opposition.

The primary is set for Sept. 9.

Coakley has argued the current agreement is preferable to litigation and the terms of the deal will reduce health care costs.

The Coakley-Partners agreement, along with signing off on the South Shore Hospital and Hallmark acquisitions, seeks to place certain restrictions on Partners over a range of years, according to the attorney general’s office. The agreement attempts to curb Partners’ contracting practices, prices and network growth over the next five to 10 years.

“We believe it is a sound and a substantially good agreement,” Coakley told reporters on Wednesday. “We welcome the court to listen to other people and weigh those things.”

In his letter earlier on Thursday, Grossman cited concerns about the deal raised by the Health Policy Commission, which cautioned in its July preliminary report on Hallmark that the merger could lead to an increase in spending in northeastern Massachusetts by as much as $23 million a year.

“At a time when families, businesses, and governments are desperately trying to lower health care costs, under the terms of this deal, we find ourselves discussing only how much they will rise and on which date they may rise further,” Grossman wrote.

Grossman added that the deal was negotiated “behind closed doors.” “Your rhetoric as attorney general has emphasized transparency and the lowering of health care costs,” he wrote. “But in negotiating this current deal, you have fallen far short of each of those objectives.”

Berwick is also against the deal. In a Tuesday email to supporters calling on them to sign a petition to block the deal, Berwick said the agreement is a “decision that will raise health care costs for people around the Commonwealth and reduce choices for patients and families.”

A coalition of Partners competitors – including Beth Israel Deaconess Medical Center, Lahey Health System, Atrius Health and Tufts Medical Center – has also opposed the deal and argued it won’t control costs.

After the Health Policy Commission voted to provide comments to Judge Sanders on Thursday, the coalition said in a statement the commission had reinforced concerns about Partners’ market dominance.

“It is critical that the concerns voiced by the HPC today and the serious issues raised by its market impact review and cost trend reports be addressed,” the coalition said. “In particular, we share the HPC’s concerns about the projected increase in premiums for consumers and employers, and the adverse impacts of this settlement on vulnerable patient populations.”

Coakley defended the deal and noted her office agreed with the judge’s move to have a public comment period. “Ultimately this is something the court has to approve or not,” she said. “So this is, I believe, a good process, and a transparent process.”